Ashtead lifts full-year guidance after ‘resilient’ lockdown period
Construction equipment hire firm Ashtead has raised its full-year guidance after a strong performance during lockdown.
Ashtead benefited from its status as an essential business during the pandemic, meaning its revenues for the six months ending 31 October slipped just five per cent to £2.5bn. Operating profits dropped 20 per cent to £614m.
“Based on our half year performance and assuming no further significant adverse impact on our business resulting from the Covid-19 pandemic, we now expect full year results ahead of our previous expectations,” said chief executive Brendan Horgan.
With Ahstead outperforming the rest of the market, new guidance was given for full-year cashflow of more than £1.2bn, up from £1bn previously. The FTSE-100 firm also said group revenue is expected to fall between three and seven per cent compared to the previously forecast five to nine per cent.
In the second quarter, revenue fell one per cent to £1.2bn, while underlying pre-tax profit dropped seven per cent to £330m, compared to declines of six and 38 per cnet respectively in the previous quarter.
Rental revenue dropped four per cent this year to £2.2bn, while revenue slipped just one per cent in the second quarter.
There have been positive signs in the construction industry with recent IHS Markit/CIPS construction PMI figures rising to 54.7 in November from 53.1 in October. The sector has been boosted by strong orders amid a boom in house prices, and rose to their highest level since October 2014 last month.
Ashtead’s board has maintained its interim dividend at 7.15p per share.
Shares in the firm are up nearly five per cent in early trading.